Buying Tiny Homes

tiny home with tree and lights
  • 2-40 hours
  • Advanced
  • 8,000-150,000

Tiny houses offer a lifestyle void of extraneous stuff. It’s a minimalist movement, a way to save money, and an alternative living style that comes with other benefits too. If you’re considering buying tiny homes to live in, lease out, or resell at a profit, make sure you understand the ins and outs of the process.

Buying tiny homes means having a plan for how and where you’ll use them, how you’ll finance them, what you need and expect from the space, and what type of tiny house is right for you.

Reasons to Buy a Tiny Home

Tiny homes leaped onto the housing scene thanks to a couple of reality shows and a housing shortage. Over the years, the concept of tiny living has taken many shapes, and people consider the lifestyle for a variety of reasons.

The first is simplicity. Before the tiny home movement really took off, the minimalist movement was seeing a spike. Current generations, weighed down by material possessions and the responsibility of maintaining them, began to look for ways to break free from the endless cycle of consuming, possessing, maintaining, and disposing.

Instead, we began purging, organizing, and prioritizing belongings in order to funnel our time and energy into only those things that bring us value or joy.

As people embraced the concept of minimalism, they found it went hand in hand with a smaller living space. This opened the door for a flood of interest in tiny houses as a lifestyle choice.

The idea of simplifying one’s life also leads to the second primary reason for the increased interest in tiny living, which is a lower housing expense. Building or buying a tiny home is generally significantly less expensive than building or buying a traditionally built house.

Plus, tiny homes are substantially less expensive when it comes to ongoing costs since both maintenance and utility costs are lower than with larger homes.

Mobility is another motivator for many people interested in tiny homes. Specifically, tiny homes that are built on a trailer allow owners to relocate on demand. For work, pleasure, or changing preferences, trailered tiny homes function much in the way a recreational vehicle does, and offer the same level of flexibility.

Many owners also choose the tiny living option as a nod to the environment. Tiny homes have a smaller environmental footprint, both during construction and during their usable lifespan. Buying less, consuming less, relying on more efficient resource management, and producing less waste all add up to eco-friendly living.

For people who enjoy spending most of their time outdoors, tiny homes support the lifestyle well. Therefore, tiny homes are popular with people who would rather be surfing, hiking, biking, golfing, fishing, and kayaking than cleaning and maintaining a home.

Disadvantages of Buying a Tiny Home

While the idea of simplifying your life and living with fewer belongings might seem appealing, it’s not a lifestyle everyone will enjoy.

The first disadvantage is obviously limited space. Living in 400 square feet requires strict adherence to organization and minimalism. If you’re sharing the space with someone, it’s even more challenging to keep things in order.

There is no room in a tiny home to have a wood shop, paint studio, or even a nursery. You probably won’t be hosting holiday gatherings, and you’ll find yourself with a limited wardrobe.

In addition, there are challenges with where you can place a tiny home. Regulations vary widely across the country and around the world, but know you will likely encounter pushback when finding a suitable location to live in your tiny home.

Tiny homes are unlike traditional homes in a wide variety of ways. For example, when it comes to investing in a tiny home, don’t expect the same return you’d likely see on a stick-built house in a desirable neighborhood.

While a well-maintained tiny house can offer shelter for a lifetime, it probably won’t be durable enough for use in fifty years, therefore it will not increase, or even hold its value in the long term.

While tiny homes are becoming more mainstream, the lending world is still hesitant to offer loans.

For banks, it’s not as strong of an investment as traditional home mortgages that rely on the home as collateral. Therefore, loans for tiny homes are difficult to find and come with higher fees and interest rates than traditional mortgages.

In summary, the disadvantages of owning a tiny home include limited living space, no room to entertain, challenges with location and financing, and a poor return as a long-term investment.

tiny home cabin

Will You Live in Your Tiny Home Full or Part Time?

When considering the purchase of a tiny home, have a clear idea of what you’re planning to use it for. If it will be your full-time home, you’ll likely want different amenities than if it will be used as a vacation, office, guest, or travel space.

Tiny Home Builders

One way to source a tiny home is to find a company that specializes in builds. This will allow you to customize the tiny house to your unique needs. However, just like in the traditional housing world, the more customization you request, the more it will cost you.

Many tiny home builders offer a selection of pre-determined designs. Choosing a package allows you to save money while still having a say in the finished products. You can also select some of the materials for the interior and exterior of the home.

Buying a Used Tiny Home

Another option that is increasingly available is to purchase a pre-owned tiny home. As early adopters begin to move away from their initial interest in the tiny home adventure, more homes are hitting the resale market. This is a great way to spend less on your purchase upfront.

Buying anything used means being extra vigilant in your inspection so you know exactly what you’re getting for your money.

DIY Tiny Homes

If you’ve got some DIY skills, or at least a strong focus for detailed YouTube videos, committing to building your own tiny home can save you a lot of cash. After all, tiny homes don’t require a large amount of materials when compared to stick-built houses, so you’re mostly paying for the labor.

Don’t overestimate your skills, however, since making a mistake can end up costing you more than simply hiring someone from the onset.

tiny home with wood siding

Pre-Built Tiny Homes

Rather than taking the custom, used, or DIY route, perhaps the most common way to acquire a tiny home is to buy a pre-built option. You can find these homes on lots locally or have them delivered from a variety of online vendors.

Where to Find Tiny Homes

We mentioned used tiny homes earlier. Finding them on the resale market is straightforward. You may need a bit of luck to find just the right thing in your neighborhood, but with some flexibility, scouring online marketplaces may offer up the perfect home for your situation.

For a custom build, it’s best to work with someone locally so you can witness the progress and show up in person when decisions need to be made. However, there are many builders that will communicate with you using all forms of modern technology and then deliver the tiny home once it’s built.

You can even order prefabricated tiny homes from Amazon.

What Size Tiny Home Should I Get?

When shopping for tiny homes, you’ll need to understand what tiny actually means. While it’s not completely standardized, in general, a tiny home fits on a trailer and it is no more than 400 square feet. Most tiny houses are eight feet wide with varying lengths and heights.

You’ll need to start with your local licensing department to find out what is legal in your area. Regulations vary across the country, even from county to county.

If your tiny home will be a permanent structure on a foundation, you’ll have more flexibility with size. However, you may have more issues with the zoning department. Never begin any type of build without first consulting with local regulators, or you could find yourself facing fines or even having to remove the structure once it’s built.

Once you know what your limitations are, you can put more focus on the details of the house size instead. Having a loft bed and skylight might mean a taller structure. If you’d rather have a room with a door, your tiny home might be longer instead.

Consider how many people and animals will share the space and whether you’ll need room to grow. Also think about maneuverability when moving the home from one location to another, if applicable.

What Materials Are Best for a Tiny Home?

Once you begin looking around, you’ll see there are myriad building materials used in tiny house builds. Some are built similarly to stick-built homes with wood framing. You’ll also see steel frames that offer a lighter overall home.

3D-printed tiny homes are now available and being used to construct tiny home communities. Then there are tiny homes made from eco-friendly and recycled materials.

You may have something specific in mind, or you may be open to the options. Just be aware that different materials offer varying levels of durability and protection.

Consider your unique situation if you want to weather tornadoes, monsoons, flooding, and wildfires.

small off grid tiny home with wood siding

Off-Grid Capabilities of Tiny Homes

Again, take into account the type of tiny home you’re considering. A tiny home on a foundation will benefit from slightly different systems than a mobile tiny home.

However, overall, there are countless ways to improve efficiency within a tiny home and even take it completely off-grid for maximum savings and flexibility.

You can equip your DIY tiny home with solar panels, for example, and rely on a backup generator as needed. Most tiny home builders offer self-sustaining solutions such as rainwater harvest, water recycling systems, on-demand water heaters, solar panels, and even wood stoves for heat.

If your tiny home will be placed on land with renewable resources, you can live off-grid by tapping into wind, hydro, or geothermal power.

Most modern tiny homes also have a well-designed system for dealing with waste. It’s up to you to reduce consumption, packaging waste, etc.

What we’re talking about here is human waste. The common solution is a composting toilet. With a layer of natural materials between your own natural contributions, these toilets turn waste into nutrient-rich compost that can be returned to the earth.

One off-grid consideration that’s uniquely modern is the need for wifi. Using a hot spot is one well-known solution. Depending on where you locate your tiny home, you may need to invest in satellite internet or some other option.

Costs of Tiny Homes

When making any purchase, the budget is a guiding force for most of us. As the popularity of tiny homes has risen, so have their costs. Plus, tiny homes are made from many of the same materials as traditional houses, so as material costs rise in nearly every category, the costs of building a tiny home have escalated too.

Like anything, there is a wide variety in pricing depending on material selection, size, customization, age, and other factors. However, most tiny homes start at around $8,000 for a very small, basic design. Realistically you’ll pay closer to the average range of $30,000-$60,000 though.

Additional expenses come from purchasing land to put your tiny home on, running utilities to your building or parking spot, pouring a foundation if needed, permits, and upgrades to appliances or surface materials.

When calculating the cost of a new build, using square footage will give you a reasonable estimate. Tiny homes cost around $300 per square foot on average. At that rate, a 200-square-foot tiny home would add up to $60,000, while a larger, 400-square-foot home would be double that. With all the modern amenity temptations, it’s not uncommon to drive a build price up to $150,000, which is why it’s important to make a plan, do your research, and stick to your budget.

Have you heard of ADUs? Are you planning to use a tiny home to fit this need? Check out our related article ADUs vs Tiny Homes vs Homes for more information. While you’re in the planning stages, look at 9 Features That Make Tiny Home Living More Fun.